It’s the debt that must be dealt with

Bob Palmitier

Monday

Aug 31, 2015 at 6:00 AM

To the editor:

Of all the issues facing the United States today, our massive debt is the worst.

President George Washington had two strong-willed men in his administration — Alexander Hamilton as the first treasury secretary and Thomas Jefferson as the first Secretary of State. These two adversaries battled over the role of the government and the economy during the first years of the nation. Jeffersonians (Democratic-Republicans) favored a weak central government and strong state governments, while the Hamiltonians (Federalists) favored a strong central government. Over time, the various factions running the federal government have vied for control and influence over that control.

Theodore Roosevelt held that the government existed to right the wrongs and injustices of our democratic society and free market economy. Our government became a testing ground for various social experiments to “fix” America. Regardless of the popular or majority position on an issue, politicians in Washington felt it their duty to dictate what was best for America.

One of the largest social experiments was Prohibition under President Woodrow Wilson. Despite public opposition to prohibition, the 18th Amendment to the Constitution was passed in 1917 and ratified in 1919. The 21st Amendment repealed the 18th in 1933.

After the depression, Franklin Delano Roosevelt regarded the revitalization of America “as a matter of social duty.” With the introduction of Social Security and other New Deal programs, FDR stated that the role of the federal government was “to secure the material well being of the American people.”

Every president since FDR except for Clinton ($63 Billion surplus) has recorded a budget deficit ranging from $3 billion for Truman to $6.6 trillion for Obama. All of these deficits, of course, contribute to our overall national debt. At the end of FY2015 the gross U.S. federal government debt is estimated to be $18.628 trillion, according to the FY16 Federal Budget.

The United States has been deadlocked on the monumental issue of its budget deficit and entitlements, unable to cut spending or raise taxes. We are slowly moving to a welfare state. Unlike communism, welfare leaves space for the market. Like communism, it is aimed to cut off individuals from their kin-based or ethno-religious communities, binding them to the dual institutions of state and the state-regulated market. Functions that were traditionally performed by the extended family — care for the sick, young and elderly; primary and vocational education; job placement; capital accumulation and transmission — are moved to the state. Welfare was to be the social contract of democracies, and the people signed on because, at least at the time, the transition improved standards of living.

Welfare brought stability to cities whose populations exceeded 10 million inhabitants and to the country as a whole. But the cost was phenomenal. The economic viability of the model depended on continuous growth of the private sector, from which taxes would flow. When that was not enough — which would not be long — the prospect of future taxes served as collateral for public borrowing.

Gross Domestic Product (GDP) did grow, but spending and debt grew faster. This is not a partisan political issue. We have had both parties in charge at different times, yet the welfare state and the debt keeps growing.

The United States is at a critical point. Our obligations far exceed our GDP or ability to generate adequate future growth. When this country fails economically, our world-wide political influence will disappear. The United States of America will degenerate into a European-style, second-class nation with little or no influence over international affairs. We will not be capable of adequately defending ourselves against intruders both military and social. We will become subjects of other governments. At that point the only recourse to re-establish American greatness will be another revolution.

Bob Palmitier

Jacksonville

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